Most people in New Jersey filing for bankruptcy are doing so because they have a variety of debts that they simply cannot pay back. Most enter the Chapter 13 bankruptcy process with the goal of having their debts discharged after the completion of the repayment plan. However, it is important to note that certain debts are more difficult than others to discharge through Chapter 13 bankruptcy.
Many people believe it is impossible to discharge student loans through bankruptcy. However, this is not true. Student loans can be discharged through bankruptcy but doing so is very difficult. It is only possible if you can prove that having to pay them back will cause you or your dependents to suffer undue hardship. This is a high bar to meet, as generally you need to show that if you had to pay back your student loans, you would be unable to keep up a minimal standard of living.
While not all tax debt is dischargeable through bankruptcy it is possible, albeit difficult, to have income tax debt discharged through bankruptcy. To do so you will need to petition the court for a special exemption, in which you state why you deserve to have your income tax debt discharged.
Not all debts are easily discharged through bankruptcy
Chapter 13 bankruptcy is a good way to have many debts discharged, but some debts are easier to discharge than others. Ultimately, this post does not contain legal advice, and should not form the basis of any bankruptcy filing. Those overwhelmed by debt will want to work with a professional to determine the best way for them to address their debt moving forward.